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Mr. Deputy Speaker: With this it will be convenient to discuss the following: New clause 9—Meaning of ticket—

   'In Part 5 "ticket" means a ticket or chance'.

Amendment No. 148, in clause 14, page 6, line 38, leave out paragraph (d) and insert—

'(d)   of the processes referred to in paragraph (c) the process involving the majority of persons participating in the arrangement relies wholly on chance.'.

Amendment No. 149, in page 7, line 7, leave out 'significant', and insert 'substantial'.

Amendmdent No. 150, in page 7, line 10, leave out 'significant' and insert 'substantial'.

Government amendments Nos. 3 to 7 and 51.

Amendment No. 152, in clause 96, page 44, line 45 at end insert—

'(11)   The Commission shall review the monetary limits laid out in subsection (3) on a triennial basis.'.

Amendment No. 153, in page 113, line 28, leave out clause 254.

Amendment No. 151, in schedule 2, page 159, line 8, at end insert—

'(e)   the numbers of those who participate by sending a communication represent a substantial proportion of the total of those participating.'.

Government amendments Nos. 56, 58 and 59.

Mr. Moss: I wish to speak to amendments Nos. 148, 149, 150, 151, 152 and 153.

Amendment No. 148 relates to clause 14, which defines a lottery. Subsection (3) defines a complex lottery as one which relies on a series of processes rather than just one. The amendment to subsection (3)(d) is designed to close a loophole. In most cases where prize competitions are effectively lotteries it is not the first stage that relies wholly on chance—this stage is often a simple multiple choice question—but the decisive stage is the one where a computer selects one of several hundred or more correct answers to win. This relies on chance alone and is usually the final stage. As this subsection stands at present, it would seem possible for a prize competition to evade the regulatory requirements applying to lotteries by contriving a first stage that relied on some notional element of skill, which in reality eliminated very few participants, if any. This would take them out of the definition of lotteries altogether, provided that they complied with subsection (6). They
 
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would then proceed to the later stages relying on random computer selection from among the remainder, which would form the vast majority of the original participants. Our view is that the Bill should provide explicitly that the elements of the process relying wholly on chance should involve the majority of the participants.

Amendments Nos. 149 and 150 should be taken together. They seek to strengthen the definitions provided by the Bill. In the view of the Lotteries Council, the use of the word "significant" in subsection (5) is just as ambiguous as the Government allege the present law to be and sends a weaker signal. The intention of the law should be that prize competitions that seek to evade being called lotteries, and thus evade the regulatory regime, should be required to embody an element of skill that is very much more than merely derisory. It is hoped that the Government will endorse that statement of the Bill's intentions. The word "significant" does not at present carry that connotation. The amendment suggest the substitution of the word "significant" by "substantial", which is the word used in the present law.

8.15 pm

Amendment No. 151 relates to schedule 2, which deals with the definition of "payment to enter". Paragraph 8 deals with the arrangements that offer a choice of free entry. The amendment is designed to close a loophole. As it stands, the paragraph would seem to enable the organisers to limit the free entries to a very small proportion of those wishing to take part, leaving the rest to pay in the usual way. If this is the case, the effect would be that they could run what are in practice ordinary pay-to-enter lotteries, but in the guise of free-entry lotteries, thereby escaping the regulatory requirements that apply to lotteries as a whole. The amendment seeks to clarify the issue by in effect providing that a substantial proportion of participants in this type of arrangement should be non-payers. Indeed, since the 1976 Act, case law has established that the number of free entrants should not be de minimis—insignificant—in relation to the number of paid entries. The Bill as drafted reflects no such provision.

Amendment No. 152 relates to clause 96. The Lotteries Council has urged Parliament to allow society lotteries to establish their own proceeds and prize limits for some time—that is, with no specific limits in the Bill, subject to the licence requirements regarding the minimum proportion of proceeds from ticket sales that go to good causes. The Budd report recommended that they should be able to do that. The Government have decided, apparently in order to protect the national lottery against a totally notional threat from charities, to ignore this recommendation. If these limits are to continue to be applied, it is important that they should be capable of amendment by subordinate legislation and that they should be regularly updated. The first of the requirements we believe has been conceded following representations, but we believe that there has been no assurance forthcoming on the second, and we hope that the Government will consider the amendment seriously.

Amendment No. 153 leaves out clause 254. The Lotteries Council is fully supportive of measures aimed at countering the threat of problem gambling. However, no link has ever been established between society
 
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lotteries and problem gambling. There is no academic research to support the proposition and the view of experts is that lotteries are way down the list of potential causes of this phenomenon. Why lotteries should be the only form of gambling singled out for this treatment in the Bill is open to question.

Clause 254 could impact on the future ability of society lotteries to raise money for good causes. If the Government are concerned about particular types of lottery played on particular types of premises, they should bring forward proposals to address these issues specifically, either directly in the Bill or by restricting the scope of regulation-making power. The regulation-making power provided for in this clause goes far too wide and is open to abuse.

Mr. Don Foster: I wish to speak briefly to new clause 9, but I begin by saying that I entirely support the comments made by the hon. Member for North-East Cambridgeshire (Mr. Moss) and his amendments. The House will be aware that my name and that of my hon. Friends is linked to those amendments.

In Committee, it became clear to a number of us that ticketless lotteries that are run by charities, in many cases hospices, would be required by the Bill to increase significantly bureaucracy and administrative costs. That is the case because ticketless lotteries are run in such a way as to ensure that those who participate in them agree to do so week in, week out, paying up front a lump sum for every week's amounts, and get a single document informing them that their name will be included in the draw every week. It became apparent, however, that the wording of the Bill would have ensured that the organisers of such lotteries were unable to continue to do that and made it necessary for them to send out a document to every participant each and every week.

Hence the increase in bureaucracy and administrative costs. Many of us on the Committee were extremely grateful to a number of the people who run such lotteries, in particular the Ty Hafan children's hospice in Wales, which worked very hard to raise its concerns with members of the Committee. It is worth bearing in mind that, over the past 10 years, some £100 million has been raised by hospices using this fundraising approach. The Minister acknowledged that there was a problem. In Committee, he said:

"naturally, we do not want to subject any hospice lottery to the cost and inconvenience of unnecessarily printing many thousands of tickets on a weekly basis. That would be stupid . . . The object of the exercise is to make it as simple as possible for charities to run such lotteries, but equally, to provide the protection covered in clause 92(5)."—[Official Report, Standing Committee B, 2 December 2004; c. 309–310.]

I was grateful to him for that, and I note that he has tabled some alternative amendments covering the issue, for which I am also grateful.

Although I shall continue to press new clause 9— I shall probably not press it to a vote, however—may I ask the Minister to give me some assurance that, after his consultations with the relevant lottery organisers, he believes that they are now satisfied with the amendments that he has tabled? In particular, I draw his attention to the reference to electronic storage of information. Has he consulted on whether such provision is future-proofed? With the development of mobile phone
 
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technology, it is likely that, within a few years, some of those organising such lotteries might wish to use mobile phones. Would that be acceptable? The development of interactive television is a further example that we have already seen. Again, it may be possible to use such technology as a means of providing the necessary information. Will he assure me that those issues are covered by the terminology used in his amendments?

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